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Sunday, December 20, 2009

HCR, Chapter and Verse - what Ezra said . . .

If you are not a full-time policy wonk, you want to know what is in the HCR bills, if you want to know what they will do, and what they don't do, you read Ezra Klein. It is that simple. One of these days the Post will realize they made a mistake and gave an actual knowledgeable, honest analyst a blog - and Fred Hiatt can't have that, and he'll be gone.

This is a good bill. Not a great bill, but a good bill. Imagine telling a Democrat in the days after the 2004 election that the 2006 election would end Republican control of Congress, the 2008 election would return a Democrat to the White House, and by the 2010 election, Democrats would have passed a bill extending health-care coverage to 94 percent of Americans, securing trillions of dollars in subsidies for low-income Americans (the bill's $900 billion cost is calculated over 10 years, but the subsidies continue indefinitely into the future), and imposing a raft of new regulations on private insurers. It is, without doubt or competition, the single largest social policy advance since the Great Society.

Not bad, huh?

This bill is likely to pass the Senate on Christmas, and head to the president's desk before the State of the Union. It will be hard to change big things about the bill between now and then. But it will be fully possible to change small things. An example came in the manager's amendment. The original Senate bill barred insurers from imposing "unreasonable" annual caps on spending. This bill bars them from imposing any annual caps on spending. That's thanks, in large part, to the left, which attacked that weakness ferociously.

There are a lot of pages in this bill. A lot of sentences. A lot of loopholes and weaknesses (alongside a lot of strengths and improvements). Not all of them will be caught between now and passage, or even between now and implementation. But some of them can be. And some small things can be added, changed or tweaked. But first, they have to be noticed and publicized. Both the underlying bill and the package of amendment can be downloaded and scrutinized here.

Each hospital operating within the United States shall for each year establish (and update) and make public (in accordance with guidelines developed by the Secretary) a list of the hospital’s standard charges for items and services provided by the hospital, including for diagnosis-related groups.

The basic compromise is that states can impose the Stupak rules on their own exchanges, but the rules will not be imposed by the federal legislation. I've been assured that at least one plan in each state will cover abortion, but I'm still trying to get clarification on how that works (my hazy understanding is that at least one of national non-profit plans, and probably more, will include abortion coverage, and they'll be offered in all states).

This isn't a great deal, but it's a lot better than what's in the House bill.

That said, I liked David Waldman's response. The problem with leaving the decision up to the states, he says, is that it doesn't go far enough. "I think states should leave the abortion question up to the counties," he explains. "Then I think counties should leave the abortion question up to municipalities. Then the neighborhoods should leave the abortion question up to each block." And each block, as you might have guessed, should leave the abortion question up to each household.

Another day, another Congressional Budget Office report (pdf) saying that health-care reform will cover more than 30 million people while substantially cutting the federal deficit.

There are a couple of changes worth noting here. First, the CBO says that the national non-profit plans will have little effect on average premiums. "The presence of the public plan had a more noticeable effect on CBO’s estimates of federal subsidies because it was expected to exert some downward pressure on the premiums of the lower-cost plans to which those subsidies would be tied," the agency concludes.

There are a couple of new insurance regulations of note. The original Senate legislation allowed insurers to place annual caps on benefits. The manager's amendment prohibits such caps. This, the CBO says, has a slight upward effect on premiums. There are also new rules prohibiting insurers from spending less than 85 percent of each premium dollar on medical care -- if they exceed that cap, they need to send customers a rebate. This lowers costs slightly.

The individual mandate has been strengthened slightly, as has the Medicare Commission. Sen. Sherrod Brown looks to have scored a win with a provision that accelerates the introduction of generic biologic drugs. Sen. Ron Wyden scored a small win with vouchers that workers can use to buy insurance in the exchange if their employer's offerings are not affordable. The voucher will be for the amount the employer would otherwise have contributed to the insurance plan, and CBO expects 100,000 people to use it.

And then there's my favorite sentence in the CBO report: "The 5 percent excise tax on cosmetic surgery was eliminated, and a 10 percent excise tax on indoor tanning services was added." Alrighty then.

The Exchange shall require health plans seeking certification as qualified health plans to submit to the Exchange, the Secretary, the State insurance commissioner, and make available to the public, accurate and timely disclosure of the following information:

(i) Claims payment policies and practices.(ii) Periodic financial disclosures.(iii) Data on enrollment.(iv) Data on disenrollment.(v) Data on the number of claims denied.(vi) Data on rating practices.(vii) Information on cost sharing payments with respect to any out-of-network coverage.(viii) Information on enrollee and participant rights under this title.(ix) Other information as determined appropriate by the Secretary.

I, for one, would like to know what percent of claims are denied by a given insurer, and whether a larger-than-average number of people are fleeing that insurer every year.

Here's the summary document Reid's office is sending around on the changes in the manager's amendments. I've bolded the bits I think are important.

Tougher Accountability Policies for Health Insurance Companies

• Stronger medical loss ratios. Health insurers will be required to spend more of their premium revenue on clinical services and quality activities, with less going to administrative costs and profit – or else pay rebates to policyholders. These more rigorous limits will continue even after the Exchanges begin in 2011, and apply to all plans, including grandfathered plans.

• Accountability for excessive rate increases. A health insurer’s participation in the Exchanges will depend on its performance. Insurers that jack up their premiums before the Exchanges begin will be excluded – a powerful incentive to keep premiums affordable.

• Immediate ban on preexisting condition exclusions for children. Health insurers will be immediately prohibited from excluding coverage of preexisting conditions for children.

• Patient protections. Health insurers will have to abide by a set of patient protections that, for example, protect choice of doctors and ensure access to emergency care.

• Ensuring access to needed care. The use of annual limits on benefits will be tightly restricted to ensure access to needed care immediately, and will be prohibited completely beginning in 2014.

• Guaranteed opportunity to appeal coverage denials. All health insurers will be required to implement an internal appeals process for coverage denials, and states will ensure the availability of an external appeals process that is independent and holds insurance companies accountable.

Stronger Policies to Make Health Care Affordable

• Innovation. Medicare will be able to test new models and, if successful, implement them via a stronger Innovation Center, Independent Payment Advisory Board, and other authorities.

• Transparency. New requirements will ensure that insurers and health care providers report on their performance, empowering patients to make the best possible decisions.

• Small businesses. A package of improvements include starting the health insurance tax credit in 2010, expanding eligibility for the credit, and improving the buying power of small businesses.

More Health Insurance Choices

• Multistate option. Health insurance carriers will offer plans under the supervision of the Office of Personnel Management, the same entity that oversees health plans for Members of Congress. At least one plan must be nonprofit, and the plans will be available nationwide. This will promote competition and choice.

• Free choice vouchers. Workers who qualify for an affordability exemption to the individual responsibility policy but do not qualify for tax credits can take their employer contribution and join an exchange plan.

• Quality of care in Medicare. Seniors will benefit when additional health care providers are reimbursed by Medicare for the quality of care they deliver, not the quantity of services they provide.

• Children’s health. Support will be extended for the Children’s Health Insurance Program and the adoption tax credit. Foster care children aging out of Medicaid will be able to retain its comprehensive coverage.

• Community Health Centers. A substantial investment in Community Health Centers will provide funding to expand access to health care in communities where it is most needed.

• Rural and underserved communities. Access will be expanded through funding for rural health care providers and training programs for physician and other types of health care providers.

• Vulnerable populations. A range of new programs will tackle diseases such as cancer, diabetes and children’s congenital heart disease, will improve the Indian Health System and will provide support for pregnant teens and victims of domestic violence.

Identifying Alternatives to Litigation

• Testing new models. States will be eligible for grants to test alternatives to civil tort litigation that emphasize patient safety, disclosure of health care errors, and early resolution of disputes, with a provision for patients to opt-out of these alternatives at any time. Alternatives will be evaluated to determine their effectiveness.